The financial crisis of 2008 led way to
a decade full of currency crises – one
after the other, companies were – and
still are – susceptible to volatile currency
events like the euro crisis, Russian ruble
devaluation and Brexit. As illustrated
in the latest FiREapps Currency Impact
Report™, companies continue to sustain
billions of dollars in negative impacts due
to currency movements.

Living in this modern currency crisis
environment has made it exceedingly
difficult and increasingly important
for organizations to explain how their
business is performing and what affects
currencies are having on financial results.
As such, finance and treasury are seeking
new ways to proactively avoid impacts
as opposed to constantly reacting to
the volatility and to support them in
delivering information and managing the
expectations of stakeholders.

FP&A Lacks the Currency
Data & Understanding that
Treasury Possesses

Historically, the currency analyses
done by treasury and FP&A were
completed in spreadsheets, and although
spreadsheets can be flexible, they are
limited in what they can do. Often times,
the data that FP&A or even supply
chain needs is siloed in systems or lies
with treasury, and the cross-functional
collaboration, time needed to gain
access and dig into currency data, and
necessary tools aren’t readily available.

The consolidation and financial toolsused by FP&A don’t provide the samedetailed currency data that is availableto treasury. In order for them to deliveran accurate picture of how currenciesare impacting results, they often have torely on treasury to supply that data. Thisis of increasing importance as, withoutit, FP&A is left scrambling to respondto questions from stakeholders andthe CFO and has to fulfill their planningand analyzing responsibilities withincomplete currency data.

The Growing Need for a
Common Currency Data
Platform

While it is clear that FP&A needsaccess to detailed currency data tomore accurately convey the effects ofcurrencies, treasury teams themselvesstill lack insight into the way in whichcurrencies impact the business. This lackof detailed data and the inability of bothtreasury and FP&A to convey reasoningand dig into the underlying factors ofwhat cause variances in results makesit exceedingly difficult to quickly andconfidently answer questions fromstakeholders.

The first step toward solving these
issues has generally been to implement
business intelligence (BI) tools as a
way of visualizing currency risk and
simplifying the management of that
risk. While BI tools can help monitor and
track KPIs with the use of dashboards
and reports, many organizations are still
unable to facilitate any sort of required
logic or derivation of data. They are left
only with visual representations of their
exposure and risk with no way to explain
what is behind the results.

To fill in this missing piece – that is, to
make sense of the metrics delivered from
business intelligence tools – modern
treasury teams have been looking to
enterprise currency analytics as the
solution. Enterprise currency analytics
effectively walk FP&A and treasury teams